RAMSEY CROOKALL & CO

EVENING REPORT

27 AUGUST 2010

A slightly better than expected read on US growth has propelled London higher, up to intraday highs near 5,200.

The preliminary report on US GDP revealed the world’s largest economy expanded at an annualised rate of 1.6% in the second-quarter, better than the 1.4% predicted, but down on initial estimates of 2.4%.

Earlier, an unexpected upward revision to UK second-quarter growth estimates kept UK shares moving in the right direction.

Britain’s economy expanded more than initially thought in the second quarter, figures showed today. Gross domestic product (GDP) grew by 1.2% during the three months to June, an even higher reading than the better than expected 1.1% growth reported for the period last month. The upward revision comes amid strength in the construction industry.

Elsewhere, commodity plays are still struggling. BP, Tullow, Anglo American and BHP Billiton are proving a drag, but most are off their worst levels.

Banks are also a weak spot after ratings agency S&P suggested management at Barclays, HSBC, Lloyds and RBS played only a bit part in their recovery, with government stimulus programmes far more important.

In company news, serviced office specialist Regus said the market remains very challenging and difficult to predict as it announced a slump in half-year profits. Profit before tax and exceptional items in the first half of 2010 tumbled to £9.7m from £50.7m the year before. In contrast, engineering conglomerate Melrose saw profits surge in the first half despite revenue going slightly ex-growth year-on-year. Headline profit before tax for the first half of 2010 was £78.1m, up from £53.0m the year before, while “as reported” profit before tax was £60.4m, versus £38.4m last year.

Finally, strong growth in Asia helped media agency Aegis lift underlying interim profits by a fifth. Total revenue rose by 4% to £663m, with operating profits up 20% at £61.1m. Pre-tax profits rose by 8% to £48.3m.

THE FTSE 100 CLOSED UP 45 @ 5201

THE DOW JONES AT 4.30 IS UP 116 @ 10,102

THE NASDAQ COMP AT 4.30 IS UP 9 @ 2128

Exchange Rates

GBP – USD 1. 552

GBP – EUR 1. 215